The Reality of Municipal Financing between Financial Dependence and the Requirements for Reforming Tax Revenue Distribution in Algeria

Abstract

This study aims to analyze the reality of municipal financing in Algeria in light of the continued financial dependence on the Public Treasury, and to demonstrate the impact of the tax revenue distribution system on the limited financial autonomy of local authorities.

The study concluded that the tax revenue distribution system, in its current form, does not achieve the desired objective of actual financial autonomy for municipalities. Rather, it reinforces their financial dependence on the central administration, which limits the effectiveness of fiscal decentralization and weakens municipalities’ ability to respond to growing local needs. This indicates that reforming the mechanisms for distributing tax revenues constitutes a fundamental entry point for strengthening municipal financing, by revising distribution criteria, expanding local fiscal resources, and improving collection and control mechanisms, in order to address developmental disparities and ensure more efficient and sustainable local development.